Cooper reveals more information about 'The Deal' in its Proxy statements

Bob Ulrich
Posted on July 22, 2013

As you might expect from a merger of this size, the proxy materials filed by seller Cooper Tire & Rubber Co. to buyer Apollo Tyres Ltd. is close to 100 pages.

Most of the Securities and Exchange Commission material focuses on disclaimers that protects both parties in the event one of them wasn't forthcoming with potentially deal-changing information, from existing encumbrances for unpaid taxes to the status of all financing.

* The two companies combined for $6.6 billion in sales in 2012.

* In addition to Cooper Tire, the parties involved in the acquisition are the following: Apollo Acquisition Corp, which is a wholly owned subsidiary of Apollo Tyres B.V. (also known as Dutch Holdco), which is a subsidiary of Apollo (Mauritius) Holdings Pvt. Ltd. Apollo Vredestein B.V. also is wholly owned by Apollo Tyres.

* If Apollo improperly terminates the agreement, then it will be forced to pay Cooper $112.5 million.

* Cooper says there are no unexpected actions or lawsuits in progress or threatened against the company. Cooper budgets millions of dollars for potential lawsuits.

* Cooper's board of directors, which unanimously accepted Apollo's offer, cannot change its mind before the shareholders vote unless it "has determined in good faith, after consultation with its financial advisors and legal counsel, that x) failure to take such action would be inconsistent with the company board's fiduciary duties under applicable law, and y) such company takeover proposal constitutes a 'Company Superior Proposal.'" Back in 1988, Bridgestone made an offer to the former Firestone Tire & Rubber Co., then Pirelli & Cie SpA came in with an offer. We all know who won that battle.

* The shareholders, by the way, are required to vote on the proposal "as promptly as reasonably practicable."

* In her letter to Cooper's suppliers, Mary Pauken, vice president of purchasing, said both Cooper and Apollo "are primarily replacement tire companies with each also having key OE relationships." From Cooper's point of view, that includes a passenger car tire for Ford Motor Co. (the Zeon RS3-A tire is OE on two 2013 Ford Focus models) and trailer tires for Wabash National Corp. and Great Wall Motor Co. Ltd. Apollo has OE contracts for Audi, Fiat, General Motors and Hyundai vehicles.

Finally, in a letter to Cooper dealers, Phil Caris, vice president of sales, said "there are no plans to make changes in the relationships we hav with you, including contract terms and conditions, product access and delivery, or your sales contacts and support team at Cooper."

What are your thoughts on the merger? Let us know what you think by leaving a comment!

For more information on the acquisition, check out these links:

"Will Cooper's management stay on after Apollo takes over?"

"Exclusive: Roy Armes talks about Cooper-Apollo."

"Was the sale of Cooper Tire inevitable? There were signs."

Related Topics: acquisitions, Cooper Zeon, Mary Pauken, OE tires, Phil Caris, Roy Armes, shareholders

Bob Ulrich Editor
Comments ( 1 )
  • Sherry

     | about 7 years ago

    Great job with the have the patience of Job to sift through all the fine print!! Can't wait to see the outcome of this new 'deal.'

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